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EXHIBIT 10.1
EXECUTIVE TRANSITION AND RELEASE AGREEMENT
This
Executive Transition and Release Agreement (this "Agreement")
is
entered into between Lavi Lev ("Executive")
and Cadence Design Systems, Inc.
("Cadence" or the "Company").
1.
TRANSITION
COMMENCEMENT DATE. As of January 1, 2005 (the "Transition
Commencement Date"), Executive will no
longer hold the position of Executive
Vice President and General Manager and will
be relieved of all of Executive's
authority and responsibilities in that
position. Executive will be paid all
accrued salary for his services as
Executive Vice President and General Manager
to the Transition Commencement Date by not
later than the following regular
payroll date. Following the Transition
Commencement Date, Executive will no
longer participate in Cadence's medical,
dental, and vision insurance plans
(unless Executive elects to continue
coverage pursuant to COBRA), and will not
be eligible for a bonus for any services
rendered after that date.
2.
TRANSITION
PERIOD. The period from the Transition Commencement Date
to the date when Executive's employment
with Cadence terminates (the
"Termination Date") is called the
"Transition Period" in this Agreement.
Executive's Termination Date will be the
earliest to occur of:
a. the
date on which Executive resigns from all employment with
Cadence;
b. the
date on which Cadence terminates Executive's employment
due to a breach by Executive of Executive's duties or
obligations under this Agreement; and
c.
February 2, 2006.
3.
DUTIES AND
OBLIGATIONS DURING THE TRANSITION PERIOD AND AFTERWARDS.
a. During
the Transition Period, Executive will assume the
position of Executive Consultant. In this
position, Executive will render those
services requested by Mike Fister,
Cadence's Chief Executive Officer ("CEO"),
Jim Miller, Senior Vice President of
Development, their successors or
appointees, or the Board of Directors on an
as-needed basis. Executive's time
rendering those services is not expected to
exceed twenty (20) hours per week
but is expected to consume 20 hours per
month.
b. As a
Cadence Executive Vice President and General Manager, as
well as other positions Executive may have
held with Cadence, Executive has
obtained extensive and valuable knowledge
and information concerning Cadence's
business (including confidential
information relating to Cadence and its
operations, intellectual property assets,
contracts, customers, personnel,
plans, marketing plans, research and
development plans and prospects). Executive
acknowledges and agrees that it would be
virtually impossible for Executive to
work as an employee, consultant or advisor
in the electronic design automation
("EDA") industry (as defined below) without
inevitably disclosing confidential
and proprietary information belonging to
Cadence. Accordingly,
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during the Transition Period, Executive
will not, without the prior written
consent of Cadence, directly or indirectly,
provide services, whether as an
employee, consultant, independent
contractor, agent, sole proprietor, partner,
joint venture, corporate officer or
director, on behalf of any corporation,
limited liability company, partnership, or
other entity or person that (i) is
engaged in the EDA industry, (ii) directly
competes against Cadence or any of
its existing or future affiliates in the
EDA industry anywhere in the world, or
(iii) produces, markets, distributes or
sells any products, directly or
indirectly through intermediaries, that are
competitive with EDA industry
products produced, marketed, sold or
distributed by Cadence. Such prior written
consent shall not be unreasonably withheld
by Cadence; provided, however, that
such consent may be in all cases withheld
with respect to the companies listed
in Exhibit A attached hereto and up to five
(5) other companies as may be
designated by the Board of Directors of
Cadence from time to time and delivered
to Executive prior to the Company's
termination of his employment (or, in the
event Executive terminates his employment,
prior to the date on which Executive
has notified the Company of his decision to
terminate such employment) or are
named as a competitor of Cadence in the
most recent applicable document filed by
Cadence before the Transition Commencement
Date with the Securities and Exchange
Commission that contains such
information.
As used in this paragraph, the term "EDA industry" means the
research, design or development of
electronic design automation software,
electronic design verification, emulation
hardware and related products, such
products containing hardware, software and
both hardware and/or software
products, designs or solutions for, and all
intellectual property embodied in
the foregoing, or in commercial electronic
design and/or maintenance services,
such services including all intellectual
property embodied in the foregoing.
c. During
the Transition Period, Executive will be prohibited, to
the full extent allowed by applicable law,
and except with the written advance
approval of Cadence's CEO (or his
successor(s)), from voluntarily or
involuntarily, for any reason whatsoever,
directly or indirectly, individually
or on behalf of persons or entities not now
parties to this Agreement: (i)
encouraging, inducing, attempting to
induce, soliciting or attempting to solicit
for employment, contractor or consulting
opportunities anyone who is employed at
that time, or was employed during the
previous one year, by Cadence or any
Cadence affiliate; (ii) interfering or
attempting to interfere with the
relationship or prospective relationship of
Cadence or any Cadence affiliate
with any former, present or future client,
customer, joint venture partner, or
financial backer of Cadence or any Cadence
affiliate; or (iii) soliciting,
diverting or accepting business, in any
line or area of business engaged in by
Cadence or any Cadence affiliate, from any
former or present client, customer or
joint venture partner of Cadence or any
Cadence affiliate (other than on behalf
of Cadence), except that Executive may
solicit or accept business, in a line of
business engaged in by Cadence or a Cadence
affiliate, from a former or present
client, if and only if Executive had
previously provided consulting services in
such line of business, to such client,
prior to ever being employed by Cadence,
but in no event may Executive violate
paragraph 3(b) hereof. The restrictions
contained in subparagraph (i) of this
paragraph 3(c) shall also be in effect for
a period of one year following the
Termination Date. This paragraph 3(c) does
not alter any of the obligations the
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Executive may have under the Employee
Proprietary Information Agreement, dated
as of May 24, 2004.
d.
Executive will fully cooperate with Cadence in all matters
relating to his employment, including the
winding up of work performed in
Executive's prior position and the orderly
transition of such work to other
Cadence employees.
e.
Executive will not make any statement, written or oral, that
disparages Cadence or any of its
affiliates, or any of Cadence's or its
affiliates' products, services, policies,
business practices, employees,
executives, officers, or directors.
Similarly, Cadence agrees to instruct its
executive officers and members of the
Company's Board of Directors not to make
any statement, written or oral, that
disparages Executive. The restrictions
described in this paragraph shall not apply
to any truthful statements made in
response to a subpoena or other compulsory
legal process.
f.
Notwithstanding paragraph 10 hereof, the parties agree that
damages would be an inadequate remedy for
Cadence in the event of a breach or
threatened breach by Executive of paragraph
3(b) or 3(c), or for Cadence or
Executive in the event of a breach or
threatened breach of paragraph 3(e). In
the event of any such breach or threatened
breach, the non-breaching party may,
either with or without pursuing any
potential damage remedies, obtain from a
court of competent jurisdiction, and
enforce, an injunction prohibiting the
other party from violating this Agreement
and requiring the other party to
comply with the terms of this
Agreement.
4.
TRANSITION
COMPENSATION AND BENEFITS. In consideration and
compensation for Executive's services
during the Transition Period, Cadence will
provide the following to Executive:
a. a
monthly salary of $2,000 less applicable tax withholdings
and deductions, payable in accordance with Cadence's regular
payroll schedule;
b. continued vesting of
stock options and restricted stock
granted to Executive prior to the Termination Date, provided
that Executive has executed all necessary stock option and
restricted stock agreements, and with the understanding that
upon Executive's Termination Date, all vested options may be
exercised in accordance with the applicable stock option
agreement, any unvested options will expire, and any unvested
restricted stock will be forfeited;
c. if
Executive elects to continue coverage under Cadence's
medical, dental, and vision insurance plans pursuant to COBRA
following the Transition Commencement Date, Cadence will pay
Executive's COBRA premiums during the Transition Period; and
d.
continued access to Cadence voicemail.
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Except as so provided, Executive will
receive no other compensation or benefits
from Cadence in consideration of
Executive's services during the Transition
Period.
5.
FIRST
TERMINATION PAYMENT AND BENEFITS. Provided that Executive does
not resign from employment with Cadence and
Cadence does not terminate
Executive's employment with Cadence due to
a breach by Executive of Executive's
duties under this Agreement, and in
consideration for Executive's acceptance of
this Agreement, Cadence will provide to
Executive within ten business days after
the Effective Date (as defined in paragraph
9 hereof) of this Agreement and
after Executive has returned to the Company
all hard and soft copies of records,
documents, materials and files relating to
confidential, proprietary or
sensitive company information in his
possession or control, as well as all other
Company-owned property, the following
termination payment to which Executive
would not otherwise be entitled:
a. a
lump-sum payment of one year's base salary at the highest rate
in effect during Executive's employment as Executive Vice
Presiden
